Some economic experts have urged the Federal Government to engage the executives of multinational companies in the country to understand their problems and offer solutions.
The economists, who spoke with The PUNCH, disclosed this following the shutting down of the operations in Nigeria by British pharmaceutical giant, GlaxoSmithKline Consumer Nigeria Plc.
The Managing Director/Chief Economist, Analysts Data Services and Resources, Dr Afolabi Olowookere, said the exit of GSK presented the Federal Government and other relevant stakeholders an opportunity to take a closer look at the manufacturing sector.
He said, “We may have a reduction in manufacturing if at all, they (firms) were manufacturing before. This is where we need to do a more critical analysis on.
“Many companies that we call manufacturing companies, are they really manufacturing? What percentage of what they are selling is actually produced here, or they are mere marketing companies for manufacturing companies somewhere else? To me, that is a critical issue.
“In addition to GSK, we ought to look at other companies, our weak economic situation, macroeconomic instability that we have always said are affecting manufacturing companies, are actually affecting them more than we see.”
Olowookere noted that for states, where those companies were located, it would be important to sit down with some of the executives of those companies and understand their problems.
Looking beyond the impact of the multinational’s exit, the Chief Economist at SPM Professionals, Paul Alaje, said that the government was losing tax revenue, while suppliers of the exiting multinationals had been left in the lurch.
He said, “The potential tax revenue that government would have collected from multinationals, other revenue that would have gone to Nigerians, which would have helped to improve the livelihood of people working in those organisations, all of them are gone. There are other sectors that depend on these multinationals; those who supply them (materials) will be affected.”
Alaje added that prices of products manufactured by the existing firm might go up due to reduced supply.
“When such an organisation leaves a country, it doesn’t bode well for the country. I can tell you that if they are producing a particular product for the country, say a drug and the number of producers has significantly reduced, what it means is that the supply size has been emaciated. When supply reduces while demand remains the same, the impact will be on pricing; high price in the medium and the short term,” he stated.
